The median price of single-family homes that closed escrow in the San Fernando Valley during November rose to a record $675,000, the Southland Regional Association of REALTORS® reported on Thursday, Dec. 21.
That was up 13.4 percent from a year ago and surpassed the prior record of $671,500 set this March, which had been the highest since the boom market of last decade.
The median price of condominiums sold was $415,000, up 9.2 percent from November 2016. The condo median price hit a record high $420,000 in June.
“Rising prices benefit sellers, which prompts some owners to list their home for sale,” said Nancy Starczyk, president of the Association. “The other side of that coin sees the pool of buyers shrink with each price hike, while two-thirds of transactions garner multiple offers from buyers wrestling over severely limited inventory.
“That’s the current market reality,” Starczyk said, noting that the impact of the recent passage of a federal tax reform law adds another element of uncertainty into any already roiled market.
Even with severe inventory limitations, REALTORS® helped close escrow on 480 single-family homes, up 5.0 percent from November 2016. Combined residential pending escrows — a measure of future closed escrow activity — increased 2.6 percent during November, suggesting a repeat of the year-end pattern that sees December closed escrows spike higher. If that pattern holds, 2017 will end with a modest increase in annual activity compared to 2016.
The 180 condominiums that closed escrows during November were 9.1 percent higher than a year ago. Like home sales, condo totals tend to rise slightly in December, which means the annual condo total also will surpass the 2016 total.
“The new record median home price is not what we would have expected at this time of year,” said Tim Johnson, CEO of the Southland Regional Association of REALTORS®. “If the Fed increases interest rates going forward, as some are expecting, coupled with these high prices and record-low inventory, housing affordability is going to be off the charts.
“It will get more and more difficult for our middle-income workers to find affordable places to live near where they work,” Johnson said. “It’s becoming more and more critical that we get additional inventory into the market.”
For the first time since March 2013, the total active inventory dropped below the 1,100-listing benchmark. The 1,075 active listings throughout the San Fernando Valley reported at the end of November were 24.2 percent below a year ago. The record low 995 active listings came in December 2012 — which was the only month below 1,000 active listings since the Association started keeping this statistic in 1986.
At the current pace of sales, the 1,075 active listings represented a 1.6-month supply. That’s well below the 30-year average of a 5.9-month supply, yet still above the record low 1.0-month supply posted in March 2004. Only three months this year — January, February and July — saw a supply above 2.0 months.
There were nine foreclosure-related transactions reported in November — seven homes, two condos — for a 1.4% share of the total 660 combined residential transactions. REALTORS® reported four short sales, all of them single-family homes, for a 0.6 percent share. Standard sales, which involve traditional buyers and sellers, totaled 641, accounting for 97.1 percent of combined residential activity.
The Southland Regional Association of REALTORS® is a local trade association with more than 9,800 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.
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